Auditors find widespread problems at Balto. liquor agency

Ian Duncan, The Baltimore Sun

State auditors found widespread problems at Baltimore's liquor agency in a review made public Wednesday, accusing regulators of failing to follow state law in awarding licenses, prematurely closing 311 complaints and handling inspections inconsistently.

The Baltimore Board of Liquor License Commissioners failed in some cases to document whether bars were being opened far enough away from schools and churches, the auditors said. They concluded that the work of 14 full-time and five part-time inspectors employed at the time of the review could be done with just six workers.

The board did not keep investigative records on half the 311 complaints reviewed by the Office of Legislative Audits. And while some establishments were subjected to numerous routine inspections, others never received a visit, according to the report.

Samuel T. Daniels Jr., executive secretary of the agency, said his organization runs on an "obsolete system that does function and functions far better than the suggestion of dysfunction that the audit report finds."

The board consists of three appointed commissioners and an agency that handles day-to-day work.

"The problem with the audit and auditors, they want to see every conceivable piece of paper, and if they don't there's the implication ... it never existed, it wasn't done," Daniels added.

The auditors recommended 24 fixes. Legislative auditor Thomas J. Barnickel III said in an interview that the board should put written procedures in place and better record its actions so managers can check the work of employees.

"There's a number of issues that they need to address to make sure that they're accomplishing their mission," Barnickel said.

Steve Fogleman, chairman of the liquor board, said that it has relied on informal institutional knowledge, but will work to publish policies and guidelines in response to the audit. He said it could take up to two years to carry out all the auditors' recommendations.

"We certainly weren't aware of the exact magnitude" of the problems, Fogleman said. "The liquor board relies on antiquated technology, they have relied on oral history … and have not written down specifics on what inspectors need to do."

The result, according to the auditors, is a lack of consistency in the way the board sets about its work.

For example, 96 license holders were inspected eight or more times in a single year, the auditors reported, but 202 were not inspected at all, and no inspector regularly met an internal target of four inspections a day. They found reports dating back to 2007 that had never been filed.

The liquor board is a state agency and not directly controlled by city authorities, but it gives revenues from fees and fines to the city, and the city's budget funds its operations.

In their response to the auditors, liquor agency officials said some problems could not be fixed without more funding, and Fogleman said in an interview that tight funding had forced the agency to lay off staff in the time since the audit was conducted.

Ryan O'Doherty, a spokesman for Mayor Stephanie Rawlings-Blake, said the board should make better use of the money it has.

"We are hopeful that the board will work quickly to address the audit findings — especially the findings that make clear that the issue is not a lack of city funding, but wasted staffing resources," he said.

Fogleman disputed the auditors' conclusions on staffing numbers, saying that Baltimore residents are very demanding of liquor inspectors, regularly bringing up issues at community association meetings and filing 311 complaints.

"The citizens of Baltimore require the services of the liquor board more than they ever have — there's so much more than these routine inspections," he said.

But the auditors found problems there, too. They wrote that board staff did not always document the results of complaints. In half of the 311 complaints they checked, auditors found no evidence of an investigation.

"Our review also disclosed that BLLC often closed cases in the 311 System prior to performing an investigation of the complaints," the auditors added. The report said the agency closed some complaints because the issue had not been tackled promptly and officials did not want city statistics to reflect poorly on them.

Auditors did find a bright spot: "The Board appeared to assess fines to licensees in a consistent manner based on the violation types."

Not all violations were handled at regular board hearings, however. The auditors reported that in some cases, agency staff would deal with problems in closed-door meetings.

"The legality of their use is questionable since they were not addressed in State law," the auditors wrote of those meetings.

Sen. Verna Jones-Rodwell, a Democrat who is chair of the Baltimore Senate delegation, said city senators have been aware of the problems identified in the audit for some time. "They are bad and they're significant," she said.

Now that the full report has been released, she said, the delegation will again review the audit. She said that if senators determine a legislative fix is needed, there may still be time to act before the legislature adjourns Monday night.